If You Webcast It, How Many Will Come?

Sidebar: A Maturing Market
Using a CDN to deliver a Webcast was a much different proposition a few years ago, as the practice of charging huge bursting penalties was commonplace across the industry. Today, through the increasing transparency in the pricing models of this market, the use of bursting penalties has mostly gone the way of the dinosaur, and customers that go over their monthly commit now only face smaller premiums rather than the doubling, tripling, or quadrupling of costs, as was prevalent in the recent past.

A typical overage amount is 15-20%, according to Jim Byrne of VitalStream. "What it does is protect us on our side from being overrun," Byrne says, "but it also helps the content owner or event planner to understand where they need to gauge their marketing and possible adjust their estimates for that next event."

Some CDNs have taken their lead directly from the cell phone industry in the way they handle customers that don’t use up the bandwidth they’ve already paid for. "We’re the ones who introduced rollover pricing," says Richard Buck of Mirror Image. "You commit to a dollar amount and then gradually use up what you’ve paid for. So we’re letting our customers commit to an annual amount and then spend that any way they want to." Beyond allowing customers more flexibility, it also benefits the CDNs as well. "Most of the time when (customers) do this, that annual amount is spent in the first few months because of the added freedom it provides," Buck continues.

Streaming customers are encouraged to push as much traffic as possible in that the higher their traffic, the more they’re able to benefit from discounted bulk rates. "They’ll drive their traffic like crazy to get those discounts," says Byrne.

This evolution of the marketplace has only benefited consumers, and, with the increased transparency of bandwidth pricing, this ongoing evolution should continue as the streaming media market matures.

Sidebar: Pinching Pennies
While properly estimating the size of a Webcast’s audience is far and away the best method for gaining control over an event’s delivery costs, there is a valve that can be tweaked to lower the delivery portion of a Webcast’s overall budget.

That valve is the bit rate at which a Webcast is encoded and delivered. "There’s an absolute direct relationship between bit rate and your delivery costs," says Buck. "From my perspective, it doesn’t hurt your Webcast to stream it at a lower level as long as it still provides a high-quality experience to the end user. It’s mostly about bragging rights when you’re doing something richer than say 300Kbps."

Offering higher bit-rate video can be a trap for some Webcasters, though. "Doing a higher bit rate carries a higher price. The flip side to that is if their users want this quality they’re forcing the content owners to put a higher bit rate out there," says Byrne. "So if they don’t put a higher bitrate out there they save money, but at the same time they risk making their customers angry."

For the most part, choosing one format over another won’t do much to lower a Webcast’s delivery costs. "There are some cost differentials between some of the formats, but in general those differentials are not as great as they used to be, and we’re working closely with software manufacturers to close those gaps even more," says Wheaton.